China plays a central role in the world economy, but also in the gold market! China is now the world's leading producer and consumer of gold. However, gold has not always been at the heart of China's culture. In recent years, Chinese investors' appetite for gold has grown as China continues to accumulate gold reserves.
This article explores the historical development of the Chinese gold market and the outlook for gold prices in China. China's large population and changing economy are driving the growth of a gold market. With the rise of gold consumption in China, is the Middle Kingdom on the verge of becoming a gold superpower?
China, the world's leading gold producer!
For more than a decade, China has been the world's leading gold producer. In 2023, its production reached around 378 tonnes, representing more than 10% of world production. China, a leader in the mining of many metals, is making sustained investments in exploration and mining. Between 2008 and 2022, the Chinese budget for gold prospecting will fluctuate between 200 and 340 million dollars a year, around half of the total budget allocated to mineral prospecting.
In addition, the creation of the Shanghai Gold Exchange in 2002 was a crucial step in China's positioning, giving domestic and international investors easier access to the Chinese gold market. From a Western perspective, gold production in China remains relatively opaque, as information is difficult to access and production costs are hard to estimate.
The growing appetite of Chinese investors

Source : Chinese gold market outlook 2025: Stabilising demand | World Gold Council
Demand for gold in China peaked in 2023 at almost 1,000 tonnes of gold. This huge demand alone accounts for around 20% of global gold demand. What's more, a large proportion of this demand is for jewellery and investment.
In 2024, gold demand for jewellery in China fell to its lowest level since 2010. This trend shows that the Chinese are losing interest in gold jewellery. One reason for this could be the inflation in the price of gold, which is encouraging individuals to turn to other types of jewellery. At the same time, the Chinese prefer to invest heavily in coins and bullion, demand for which is at its highest for almost 11 years at 253 tonnes. The emergence of a middle class in China is leading to growing savings, which are benefiting assets such as gold.
According to Ray Jia of the World Gold Council, ‘we expect a continued divergence between gold jewellery consumption and investment demand in 2025’. What's more, ‘demand for gold in China is not driven solely by the price of gold. For example, economic growth is the fundamental driver of both gold jewellery consumption and bullion and bullion coin consumption. And the number of marriages, which has an impact on the purchase of gold jewellery, is also an essential factor to monitor.
What are China's gold reserves?
The People's Bank of China (PBoC) has pursued an aggressive policy in recent years, regularly increasing its gold reserves. Through its gold purchases, China aims to make up for lost time on the international stage. By 2023, China will hold over 3,300 billion dollars in foreign exchange reserves. This colossal stock enables it to stabilise the yuan without having to sell its dollar reserves on a massive scale. This strategy helps to keep the yuan low, thereby encouraging exports, the key driver of the Chinese economy. Thanks to these reserves, China remains the country with the largest stock of foreign currency in the world.
Officially, China holds more than 2,200 tonnes of gold, a significant but modest figure compared with its stock of foreign currency. In fact, gold accounts for just 4.3% of its total reserves, a far cry from the 60% to 70% held by countries such as the United States, France, Germany and Italy. This disparity highlights a ‘strategic gap’ that Beijing is seeking to close.
To strengthen the stability of the yuan and reduce its dependence on the dollar, China has undertaken to increase its gold reserves. In 2023, it added a considerable 225 tonnes to its stockpile. However, purchases slowed sharply in 2024, with only 29 tonnes acquired in the first three quarters, marking a pause in its strategy of rapid accumulation. This reflects China's adjustments to global economic fluctuations and exchange rate movements.
Finally, if China were to increase its gold holdings to levels comparable to those of Western countries, then China would need to hold a gold stock close to 35,000 tonnes. In other words, as much as all the gold held by all the central banks to date. This comparison shows the considerable potential of gold in China.
The Shanghai Gold Exchange, China's central gold centre
According to the World Gold Council, ‘the three main gold trading centres are the London OTC market, the US futures market and the Shanghai Gold Exchange (SGE). These markets account for over 90% of global trading volumes and are complemented by smaller secondary market centres around the world’.
The Shanghai Gold Exchange (SGE), founded in 2002, is the leading gold trading platform in China, playing a central role in the global precious metals market. In 2024, the SGE saw an increase in trading volumes, indicating growing investor interest in gold. This trend is attributed to a number of factors, including global economic fluctuations and monetary policies.
Last year, speculators bet heavily on the rise of gold on the Chinese market, holding up to 300 tonnes of ‘open interest’ in April (i.e. the volume of open contracts to trade gold). According to John Reade of the World Gold Council, ‘Emerging markets have been the biggest end consumers for decades, but they have not been able to exercise pricing power because of fast money in the West. We are now at the stage where emerging market speculative money can exercise pricing power.

Source : Chinese speculators super-charge gold rally
Since then, China has become an increasingly powerful center of gold trading. Today, this growing influence means that China is playing an increasingly important role in setting the price of gold. This development on the international financial scene is considerable, and is set to increase in the years to come.
Gold, silver and paper... in the history of China
China was not culturally predisposed to becoming the world's largest gold market. In ancient times, gold was regarded in China as a symbol of wealth and power, but it was not yet widely used as a medium of exchange. It was not until the Zhou dynasties (1046-256 BC) that gold began to be used in the form of ingots for important transactions and as a treasure for the elite.
Nevertheless, silver became the main currency of exchange from the Tang dynasty (618-907 AD) onwards. For a long time, silver dominated the monetary system, largely thanks to the availability of local mines and massive imports of silver from Japan, and later from the Americas via European trade networks.
China was also the first country to develop banknotes, following in the footsteps of the invention of paper around the 2nd century in China. The Jiaozi, a form of banknote, appeared for the first time in 1023 in central China. Gold was therefore not central to Chinese culture, which already favoured paper over metals. But excessive use of paper money led to episodes of hyperinflation, notably under the Yuan (1271-1368) and Ming dynasties. As a result, silver and gold retained their role as reliable stores of value and instruments of exchange.
But it was not until the Qing dynasty (1644-1912) that China intensified its gold production through mining and improved extraction techniques. In addition, the development of international trade made it possible to take advantage of the scarcity of gold in China, by buying silver locally at a derisory price and exporting it, notably to Europe. Gold therefore gradually gained in importance in China, which was then faced with the rise in power of European countries.
Towards a greater appreciation of gold in yuan?
Over the last two years, the yuan has continued to show downward variations. In 2024, the yuan reached its lowest level in September, at around CNY7.01 per USD1, before depreciating further to reach CNY7.33 per USD1 in January 2025. The fall in the value of the Yuan against the dollar can be explained by the slowdown in growth in China, which is still higher than in the United States, but which is causing downward pressure on interest rates and the exchange rate.

This dynamic has had the effect of amplifying the rise in the price of gold in China. As a result, the rise in gold is amplified in China, which may explain the growing investment demand from private investors, who see gold as an investment opportunity in the face of the devaluation of the Yuan.
Towards a gold superpower?
The effect of this dynamic is to amplify the rise in the price of gold in China. As a result, the rise in the price of gold is amplified in China, which may explain the growing investment demand from private individuals, who see gold as an investment opportunity in the face of the devaluation of the Yuan.
Gold plays a crucial role in China's economic and financial strategy. The Chinese gold market is likely to continue to grow, supported by robust domestic demand, favourable government policies and a strong position in the global market. The strengthening of gold reserves and the development of infrastructures such as the Shanghai Gold Exchange illustrate China's determination to establish itself as a key player in global finance.
Conclusion
The growing importance of gold in China, for both private individuals and the state, also illustrates the needs of a changing economy. From its ancient history marked by the preponderance of silver to its current position as world leader, China is demonstrating a unique ability to adapt its gold market. Trade tensions with the United States and Europe are also influencing gold reserve policies. Gold is becoming a shield against potential sanctions or fluctuations in international markets, a form of ‘de-dollarisation’ in disguise.
Finally, China is investing massively in African gold mines, particularly in Ghana and Sudan, strengthening its grip on the region's strategic resources. For example, Ghana, Africa's leading gold producer, is a privileged partner of China. Chinese companies such as China National Gold Group and private players have invested heavily in Ghana's mining infrastructure.
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